New Retail Chain Aims To Elbow Out Big Suppliers

A new retail chain called Ehad is taking aim at the bugaboo of high prices by cutting out what it says is the main reason for it — the big companies.

Marketing giants like Osem, Strauss, Unilever and Tnuva will not get shelf space in the store, making room for products of smaller producers at fairer prices.

Iri Shahar, formerly of the Fishman Group retail division, who is heading the new venture, told Globes: “In each category, the chain has selected for the consumer the product that represents the fairest return for their money. At Ehad there are not different manufacturers for the same product, as it does not want to create the illusion of imaginary variety and competition.”

Shar blamed the unusually high prices in Israel, as compared to Europe, on “the domination by the large food companies … which do not allow genuine competition in the market, and elbow out the small suppliers who can offer their products at low prices. Expensive is no guarantee of quality. Advertising, marketing and PR don’t mean anything other than the economic strength of the advertiser.”

Ehad will have to overcome the skepticism of the small suppliers themselves. Liora Birnhack-Marcus, owner of Manamim Food Industry, explained that “one of the biggest problems of the small manufacturers is distribution. Unless Ehad has a central warehouse that helps the small manufacturer, there is no chance of the small manufacturers reaching it, because they have no distribution network that can reach small points of sale. What will they unload? Two crates of biscuits? Five crates? That’s not profitable either.”

The chain’s first of four planned branches opened on Monday in Ra’anana. The branches will be small, each covering 21 square feet, about the size of a minimarket, and does not allow goods to be stored in large quantities or in a wide variety. Supermarkets generally cover 6,000-18,000 square feet.

This article appeared in print on page 6 of the January 20th, 2015 edition of Hamodia.